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ERA MORTGAGE OFFERS LOAN PROGRAMS TO HELP CONSUMERS FINANCE DOWN PAYMENT & CLOSING COSTS
Programs offer financial options for customers purchasing a home PARSIPPANY, NJ, November 20, 2002 - One of the biggest roadblocks for many homebuyers is savings for a cash down payment. What many consumers don't know is that there are several specialized mortgage programs that require little or no down payment. Lew Sharpless, regional manager, ERA Mortgage, says several types of government and conventional loans can ease the worries related to financing a down payment. "A lot of people think that they need at least 10 to 20 percent of the purchase price to buy a home," explains Sharpless. "That is not the case today." One of the government programs is the "Veteran's Administration Loan." Through this program, eligible military personnel can finance up to 100 percent of a home, even if their credit is imperfect. It also permits the seller to contribute toward the closing costs. "With this type of loan, the mortgage company does not handle the appraisal," notes Sharpless. "The U.S. Department of Housing & Development (HUD) controls the appraisal process." A government "FHA Loan" requires less than 3 percent as a down payment and allows the borrower to roll some of the closing costs into the mortgage. "The FHA loan is easier on credit history, but may be tougher on underwriting the appraisal. They will pick up on things such as peeling paint and loose railings." In addition to government programs, there are several conventional loans for consumers who have limited funds. For example, there are "Community Lending Programs" that enable a borrower to finance 105 percent of a property's value provided that the homebuyer can pay $500 or 1 percent of the purchase price, whichever is less. "To take advantage of this program, homebuyers must meet HUD median-income guidelines, which may vary from county to county," says Sharpless. "Also, the customer must have good credit, but doesn't need to have a cash reserve for the monthly mortgage payment." Sharpless says another option is the "Cool Program," a product of ERA Mortgage that gives 100 percent financing through a standard mortgage. To qualify for this program, the borrower must have two months of mortgage payments in reserve. Another specialized loan program offered by ERA Mortgage is the "Cool 56 Program." Like the other programs, the borrower doesn't need cash for a down payment, but is only required to pay interest on the loan. Principal payments are made at the consumer's convenience. "As a result, the borrower's monthly payment is low so they can leverage their cash," explains Sharpless. "This is good for people who earn bonuses and prefer to pay down principal in lump sums. "It's important to note that with any loan of this type, borrowers need to make sure there are no provisions that penalize them if they pay the loan off early." For additional information about these loan programs or other mortgage products, call ERA Mortgage at 1-877-886-1175.
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